FERC OKs start of Elba Express expansion

OREANDA-NEWS. June 08, 2016. The US Federal Energy Regulatory Commission (FERC) today authorized Kinder Morgan to start construction of additional north-to-south capacity on its Elba Express pipeline in Georgia, to serve regional gas demand and the planned Elba Island LNG export terminal.

Midstream company Kinder Morgan owns the existing Elba Island LNG import terminal near Savannah, Georgia, and will own the planned export facility at the same site. It also owns the 189-mile (304km) Elba Express pipeline that was placed into service in 2010 to send regasified LNG from Elba Island northwest to the regional grid. It connects with Transcontinental pipeline along the Georgia-South Carolina border, as well as with the Southern Natural Gas pipeline in Georgia.

FERC on 1 June approved construction and operation of the LNG project and expansion of the Elba Express pipeline, but Kinder Morgan needed to file implementation plans to get further approvals to start construction of various parts of the project. Kinder Morgan on 3 June filed an implementation plan for the pipeline modifications.

Today's order did not authorize construction to start on the planned \\$2bn LNG export terminal. Kinder Morgan previously told Argus it plans to start construction of LNG export facilities by early August.

New or expanded compression would be built along the Elba Express pipeline in Hart, Jefferson, Effingham and Chatham counties, Georgia, as well as in Jasper county, South Carolina. The three-phase pipeline expansion has an estimated cost of \\$343mn.

Elba Express has signed seven precedent agreements with six shippers for 769mn cf/d of new north-to-south capacity.

Phase 1, which would add 686.6mn cf/d of north-to-south capacity, will have three parts. The first two parts will come on line in November and December, adding 590mn cf/d of southbound capacity for regional customers and the liquefaction terminal. The third part will come on line August 2017, increasing new southbound capacity to 686.6mn cf/d to provide the remaining gas for the planned first six liquefaction trains.

Phase 2 would add 138.1mn cf/d of southward capacity by November 2017, primarily to serve the remaining four liquefaction trains. Phase 3, which would add 229.4mn cf/d of southward capacity for regional demand, is scheduled to be finished by June 2019.

The US Department of Energy has authorized Elba Island to export up 4mn t/yr to countries that have free trade agreements (FTAs). With FERC construction authorization, the agency can now evaluate an application to export the amount to non-FTA nations.